US trade deficit up

The US trade deficit was higher in May than it was in April, but still came in lower than had been anticipated by analysts. The increase from April to May was entirely due, according to reports, to the higher cost of crude oil, which was $4.92 per barrel higher in May than it was in April. In the absence of that rise in prices, the deficit would have been $3.9 billion lower in May than in April.

The May deficit was up 0.8 percent to $63.8 billion. It has been expected to hit $64.9 billion. Meanwhile, exports of goods and services were up 2.4 percent in May, to $118.7 billion. Exports of civilian aircraft, consumer goods, and industrial supplies and materials were up, while the export of vehicles, parts and engines were down during the month. Analysts said that the increase in exports relative to imports was a sign that the US economy is slowing down as domestic demand drops.

The May trade deficit with China was up to $17.7 billion. The growing US debt to China has been behind recent calls from Congress and the Bush administration for China to revalue its currency.

The total trade deficit for January to May of this year is at $317.9 billion, putting it on track to exceed the $716.7 billion record trade deficit in 2005.

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